Ringgit Rises On Moody's Positive Sovereign Credit Rating

By Danni Haizal Danial Donald

KUALA LUMPUR, Jan 27 (Bernama) -- The ringgit opened higher against the US dollar, bolstered by Moody’s recent positive rating on Malaysia’s sovereign credit rating, an analyst said.  

At 8 am, the ringgit strengthened to 4.3710/3790 against the greenback, compared to Friday's close of 4.3750/3800.  

Bank Muamalat Malaysia Bhd chief economist, Dr Mohd Afzanizam Abdul Rashid, said the rating reflects credit rating agencies' confidence in the Malaysian government's commitment to restoring fiscal health.  

"Moody's has affirmed Malaysia's sovereign credit rating at 'A3' with a ‘stable outlook.’ This indicates that the agency recognises the government’s efforts to narrow fiscal deficits, projected to decline from 4.3 per cent of gross domestic product (GDP) in 2024 to 3.8 per cent of GDP this year.  

"Consequently, support for the ringgit should be evident in the medium to long term as the currency remains undervalued," he told Bernama.  

Meanwhile, Mohd Afzanizam noted that investors remain cautious ahead of this week's US Federal Open Market Committee (FOMC) meeting, where policymakers' actions will provide guidance on economic policy directions.  

"Market consensus suggests the FOMC will maintain the Federal Funds Rate at 4.50 per cent. Investors are keen to see the latest assessments, especially following recent developments concerning US tariffs," he said.  

He added that the US administration's proposed sanctions and tariffs on Colombia, following its refusal to allow two US military aircraft to deport migrants, could also shape sentiment.  

Mohd Afzanizam forecasted that the ringgit is likely to trade in a tight range of RM4.37 to RM4.38 in the near term.  

The ringgit traded mostly higher against major currencies. It edged up against the Japanese yen to 2.8066/8119 from Friday’s 2.8115/8149 and appreciated against the euro to 4.5747/5831 from 4.5911/5964. However, it weakened against the British pound to 5.4454/4554 from 5.4373/4435.  

Against ASEAN currencies, the ringgit also traded mostly higher. It strengthened against the Thai baht to 12.9696/13.0037 from Friday's 13.0015/0241, rose against the Singapore dollar to 3.2411/2476 from 3.2482/2522, and inched higher against the Philippine peso to 7.49/7.51 from 7.50/7.51.  

The local note, however, was little changed against the Indonesian rupiah at 270.2/270.8 compared to 270.5/270.9 on Friday.  

-- BERNAMA